ZURICH and LENZBURG, Switzerland, Nov. 2, 2023 /PRNewswire/ — Switzerland, a global leader in financial innovation, is taking a significant leap forward with the collaborative efforts of financial markets participants to develop the digital financial markets of the future.
SIX, the Swiss National Bank (SNB) and six commercial banks, will collaborate on a ground-breaking pilot focused on tokenized central bank money for financial institutions (wholesale CBDC).
This pilot, Helvetia Phase III, will, for the first time, see the orchestration of a real Swiss Franc wCBDC settling digital securities transactions. SIX Digital Exchange (SDX), the world’s pioneering fully regulated Distributed Ledger Technology (DLT)-based financial market infrastructure for digital assets, will act as a trusted gateway and will host the pilot on its platform. The pilot builds on the findings of earlier Helvetia Phases I and II by the BIS Innovation Hub, the SNB and SIX.
The collaboration involves Banque Cantonale Vaudoise, Basler Kantonalbank, Commerzbank, Hypothekarbank Lenzburg, UBS, and Zürcher Kantonalbank as existing SDX member banks. In addition to the SDX platform, the pilot uses the infrastructure of Swiss Interbank Clearing SIC, which is operated by SIX and SIX SIS, the national Central Securities Depository (CSD) of the Swiss financial market and an International Central Securities Depository (ICSD). The pilot will run from December 2023 to June 2024.
The pilot’s objective is to test, in a live production environment, the settlement of primary and secondary market transactions in wCBDC. Participating banks will be able to issue digital Swiss Franc bonds, which will be settled against wCBDC on a delivery-versus-payment basis. Helvetia Phase III will also extend to the settlement of repo transactions, which are initiated on the CO:RE trading platform of SIX Repo and administered by the Triparty Agent of SIX SIS. These transactions, which are conducted in test environments, will be collateralized by digital bonds eligible for SNB repo transactions and settled on SDX in wCBDC.
The collaboration underscores the role of DLT as a catalyst for digital asset adoption, showcasing increased transparency and efficiency in the regulated financial system. “Switzerland has taken a leading role in this technological evolution, with SIX, SDX specifically and our members and in collaboration with the SNB at the forefront. This ground-breaking initiative is poised to open a new era of digital finance and shape the trajectory of the global financial industry”, says David Newns, Head SDX.
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SOURCE SDX (SIX Digital Exchange)
Featured image: depositphotos © Primakov
